Hotel Operators’ Sentiment Survey 2024-2025

Trading performance trends in APAC as of YTD October 2024

Amid post-pandemic recovery and current economic conditions, the hotel industry continues to grapple with ongoing challenges:

1. Labour & Talent: Scarcity of talent persisting in Asia Pacific, with some nuances by subregion

2. Food & Beverage (excluding MICE): Light at the end of the tunnel with stable margin?

3. MICE & Weddings on standby

4. Implementing technology: A top priority in all aspect of hotel operations

5. Sustainability on the forefront
    

• Assess the success on performance by outlet and meal period analysis in each outlet. For instance, is the outlet’s revenue growth contributed by higher breakfast contribution (due to stronger occupancy yet usually of lower profitability) or does it span across all meal periods?

• Is the outlet optimising the space and seat utilisation?

• Seats turnover by specific time period for lunch/dinner to look at manning.

• Consider different micro-concepts for different meal periods to explore improving the space utilisation

• Alternative usage – e.g. events, private dining space

• Review current operation and evaluate the tactical promotions that are ROI-driven and profitable. Explore alternative form of operating model – collaboration/partnership/F&B operator & brand.

• With inflationary pressure on cost of goods and cost of living, menu optimisation whilst ensuring a value proposition, is crucial to drive guest spending. Hotels should adopt a more commercial approach to formulating F&B strategies.

Hotels in Asia Pacific are showing strong interest in technology investments for the year ahead as technology support enhancement in hotel operations: improve efficiency in manpower, reduce energy and water consumption, as well as reduce waste. Ultimately, embracing technology appears to benefit the bottom line whilst running hotels at a more efficient way.

It is no surprise that technology upgrades and Mechanical, Electrical and Plant (MEP) improvements remain the key priorities in CAPEX since the 2023/2024 HOSS analysis, but expenditure related to brand standards overtakes sustainability enhancement in third spot.

Similar to the pressing need to embrace technology in hotel operations, implementing sustainability measures is now more than ever in hoteliers’ radar in Asia Pacific, especially since the recent release of the 12^th edition of the USALI which includes metrics related to energy, water and waste. In addition, the growing scrutiny from owners, investors and financial institutions on sustainability and green actions are now more than ever encouraging hoteliers to put into actions their sustainability plans.

Brand standards in particular is the key motivation to invest on sustainability for most of the hotels in Asia Pacific, in line with CAPEX priorities, yet the lack of funding persists.

• Focus on transition to new USALI standards to capture Energy Waste and Water data and use data for baselining.

• More corporate businesses considering sustainability/ESG accreditation for RFP and as such hotels need to work towards meeting these new criteria.

• ESG Legislations and stock exchange regulation in more advanced countries are expected to drive ESG data and climate risk transparency

• Growing role of international operators in driving ESG requirements as brand standards.

• Increasing scrutiny by buyers, lenders and investors in hotels of ESG standards should encourage owners to be on the front foot in their ESG credentials